Theoretical, methodological and practical issues of choice models

Abstract

This paper analyzes and synthesizes the fundamentals of discrete choice models. This paper alsodiscusses the basic concept and theory underlying the econometrics of discrete choice, specific choicemodels, estimation method, model building and tests, and applications of discrete choice models. Thiswork highlights the relationship between economic theory and discrete choice models: how economictheory contributes to choice modeling and vice versa.
 Keywords: Discrete choice models; Random utility maximization; Decision makers; Utility function;Model formulation